Recovering From the Loss of a Distance Education Unit

In 2011, the University of Kansas Continuing Education division lost its distance education unit, but administrators built a plan to recover revenue and coordinated with the main campus to ensure that the self-sufficient unit would continue to operate smoothly.

The following interview is with Fred Pawlicki, the executive director of the Continuing Education division at the University of Kansas and Soma Chakrabarti, associate director of the Continuing Education division at the University of Kansas. In 2011, the University of Kansas’ distance education unit, which was once housed within the Continuing Education division, was moved, creating some unique challenges for the university’s continuing education administrators. In this interview, Pawlicki and Chakrabarti discuss the strategies they put in place after losing the distance education unit to recover and continue to succeed as a self-sufficient, revenue-generating division of the University.

1. For some background, what happened with the distance education unit at the University of Kansas (KU)?

Fred Pawlicki (FP): Well, the distance education unit was an independent study unit that operated for probably 40 or 50 years. It started out as a correspondence-type course and it evolved into regular classes, and then it evolved in the last several years — before it was moved — into mostly online classes.

The University decided that they needed to centralize the distance learning program at KU so that all of the registrations and all of the record keeping would be centralized through the University’s registration system. Independent study, when it was at KU, had its own registration system and managed its classes using contract instructors as well as faculty. And, the contract instructors would normally be adjunct faculty or GTAs (Graduate Teaching Assistants). It was about the same quality across the board as the courses that are taught in the classrooms at KU.

In order to centralize the entire process, independent study was moved into what is now called the Center for Online and Distance Learning, which is also a unit of Academic Affairs — as is Continuing Education. So, it was kind of a parallel move within Academic Affairs, but it was more to centralize the operation so it was all in one place and it all looked the same to the student who was registering and it utilized the same semester-based system, whereas the independent study was “enroll at any time and take at your own pace.”

2. What was the impact of losing the distance education unit on continuing education revenues?

FP: The impact was a large impact because that operation was the largest single source of net revenue that continuing education had at that time. So the impact was very significant and it precipitated me having to look at, “How will we reorganize continuing education to generate enough revenue from our non-credit offerings to be able to still be a viable unit at the university?”

Soma Chakrabarti (SC): … Almost all of the continuing education units in the United States – and even probably in Canada too – that they are not just revenue generating, they have to be self-supporting. So, we have to recover all the costs and still generate some net revenue from each program to support the supporting units such as marketing, IT and business. So, what happened is that when the net revenue from this unit [left], then obviously we had to replenish, or fill in the void, with other things, and we did not have anything at that time to fill in that huge void.

That was the biggest challenge that we had at that time, but we had to think of innovative ways to do business and come up with other solutions. …

3. What are some of the strategies the continuing education unit put into place to recover from this loss?

SC: … The first thing that we did was to see which are the most revenue-generating units and to see what they are doing. And not just net revenue; overall revenue-generating units. So, that was one thing. Second thing was that we had to look at … which processes are redundant and that we can eliminate and save some money. But most importantly, what we looked into were the people, because the people will actually manage the processes and provide the services to the educational community or to the industry.

So, we analyzed the people, their knowledge, skills and abilities, their strengths and weaknesses, and put the people in the right positions. …

FP: … A little background on continuing education. I came to KU continuing education in … May 2006 and my challenge at that time was to help continuing education get free of general revenue funding and we worked towards that goal quite successfully. Actually, the year after independent study left, we would have been in a positive cash situation, and the decisions that precipitated changing the staff all around were exactly as Soma said: to utilize the best people that we have where they can be most effective. …

What we did was look at who would be the best fit for the many different things that we do. And some of the people were in the main leadership group, the first tier below the associate directors that were moved from leading one group to leading another group because their personality, their ability to interact with that constituency and a number of other factors were all considered in the decision making. But it was a difficult situation for me — and, I’m sure, my associate directors — because we have to operate like a business to be a totally self-sufficient unit, and because of that, we have to make decisions like a business would. So, it was kind of a top-down reorganization, where we sat down with the staff … and I laid out the changes and who was going to be doing what and we took a few questions, but … all of a sudden, everything has changed for everyone. So, of course, it did create some anxiety in the staff and some need to just kind of take a breath and step back for a little while and let it sink in.

So, I made it effective two weeks after we announced it so … people could go home and take a break and then come back, and then we would start the new process.

SC: Yes, I will also talk a little bit about our strategic goals and initiatives. Of course, we have to generate revenue and we have to be self-supporting. … What we did is [we analyzed] what the industry needs … and where we have our markets in some of our programs and where we would like to go.

So, these are the … things we analyzed, and we are taking some strategic initiatives now. One of them is, what I would say, aggressively pursuing the international market. We’ve had very good success in China and in other parts of the world. Not just in Asia, but in Europe and in South America. So, we want to pursue that. Second thing is that we wanted to revise the Conference and Event Management Center. Third is that we wanted to have more interdisciplinary programs, which we have already started doing. And fourth, we wanted to realign our operational units as support units for the initiative. So these are goals that we have taken, other than working with the public safety programs that the continuing education programs have, as well as Osher Lifelong Learning programs. So, these are the major strategic initiatives and goals that we have taken.

4. Is there anything you’d like to add about the loss of the distance education unit and the way that the continuing education division has covered from that loss?

SC: … The way we planned the loss that we had, we had planned to recover it in three years. … We are hoping that we will be able to recover and balance the budget — that we will be able to break even completely — in three years. So, we’ll see, but we are hoping that we will be able to get there.

FP: … We had an excess revenue over expenses surplus, which was in the form of a carry-forward type of fund. We negotiated with the Provost’s office that, with the loss of our credit bearing courses, that we would like to be able to utilize that carry-forward money in our three-year process to fill in any blanks until we got back into the break-even point, which was our original challenge. Because we had already reached my original challenge, the last year with the independent study, and we would have been in the black had that change not occurred.

So, the Provost’s office graciously agreed to that three-year plan where we use a little bit of the reserve fund each year to supplement for three years until we get to the break-even point. And, we’re happy to say that, after the first year, we only needed about half as much as we had projected. So, we’re on the right path and it looks like this current fiscal year, we have a lot of activity and we should again be able to exceed our expectations from the initial data that we have.

Readers Comments

The University of Kansas Continuing Education division’s approach to pursue international markets and introduce more interdisciplinary programming — essentially, to expand operations — struck me as interesting. It is perhaps the opposite of what I would have expected from a division that had just lost a significant portion of its annual revenue. Here’s hoping their bold approach produces the desired results.

Thanks for your comments, Rebecca. I would say that so far this approach has produced good results and helped us recover more than a third of the lost net revenue or overage. Approaching international professional education market with suitable training programs worked well.

The division managed to negotiate quite a good deal with the university at large to use part of its reserves to cover operational gaps in the first three years following the reorganization. This demonstrates the importance of having strong support among the top tiers of the administration in order to ensure a smoother transition. Best of luck!

Re-evaluating people’s positions? Uncovering redundant processes? Are these euphemisms for letting staff go? Ms. Chakrabarti is noticeably silent on this topic. This interview was a tad disappointing in that it produced many vague statements and no real lessons learned for other institutions undergoing similar transitions.

Ewan, many thanks for your comment. Just for your information, not a single person was “let go” and more people were hired and are being hired to support the newly introduced professional programs for the international market. What may not have come out of the interview is that we did a thorough analysis of (1) people’s strengths, weaknesses, knowledge, skills and abilities, and (2) consolidation of redundant processes and innovation of new processes. Both were used to put the right people in the right job and streamlining the processes. Neither was easy, but worked well for our division. That’s the story. Thanks, again!